PHNOM PENH, Jan 4 (Reuters) - Anti-government demonstrators said on Saturday they had called off a mass rally they had planned to stage in the Cambodian capital on Sunday after a bloody crackdown on garment workers allied with the protest movement.

The decision to call off the rally came hours after security guards and city workers, watched over by riot police, dismantled a camp occupied by anti-government demonstrators.

Friday's clashes, during which police shot dead four people, have stoked a political crisis in which striking workers and supporters of the opposition Cambodia National Rescue Party (CNRP) are challenging a government they say cheated its way to power and is depriving them of a fair wage.

CNRP leader Sam Rainsy had vowed earlier that Sunday's mass march and rally would go ahead. He also condemned Friday's violence and demanded a thorough investigation.

"The Cambodia National Rescue Party would like to inform all national compatriots that the party will suspend the (planned) protest," the CNRP said in a brief statement.

Hundreds of CNRP supporters had been camped since Dec. 15 in tents around a stage in Freedom Park, the only place in Phnom Penh where protests are allowed.

Unions representing garment workers want better pay and support the CNRP's demands for a re-run of an election in July it says was rigged to allow long-serving Prime Minister Hun Sen to remain in power.

Friday's clashes took place at Canadia Industrial Park, also in Phnom Penh, which is home to dozens of factories that make clothing for Western brands such as Adidas, Puma and H&M Hennes & Mauritz.

In Germany, Puma said in a statement production at some of its plants in Phnom Penh had been halted for now but gave no other details. Puma's sporting goods are made in about 400 factories worldwide, 13 of them in Cambodia.

An Adidas statement sent to Reuters said the group was concerned about recent events in Cambodia and was in contact with its suppliers there. It gave no further details.

Riot police, however, held back from the main site while security guards and city workers in plain clothes, some carrying axes and steel pipes, moved in to dismantle the stage and tents. Three helicopters flew low overhead, while riot police carrying batons kept journalists away from the site.

The CNRP accused "forces in civilian clothing" of beating demonstrators and urged its supporters not to retaliate.

'DESTRUCTIVE DEMONSTRATORS'

Phnom Penh municipality spokesman Long Dimanche said CNRP leaders had been sent a letter telling them protests would no longer be tolerated.

"Their protests have been peaceful at the park but their supporters have marched out of the park, destroying private and public property, closing down roads and causing social instability," he said.

Rainsy called for both sides to exercise restraint.

"We deplore and condemn the violence that the armed forces under the instruction of the current government has used against workers," Rainsy, a former finance minister, told a media briefing before the protest camp was cleared.

"So we have made an appeal to both sides, workers and armed forces to withdraw to stop using any form of violence so we can find a peaceful solution," Rainsy said.

Amnesty International joined Rainsy and Cambodian rights group LICADHO in demanding an investigation into the violence.

"The Cambodian government has to rein in its security forces," said Amnesty's Cambodia researcher Rupert Abbott.

Friday's violence followed a crackdown a day earlier outside a Yakjin (Cambodia) Inc factory in another part Phnom Penh, when armed troops hit protesters with batons, wounding 20 people. Yakjin makes clothing for Gap and Walmart.

The CNRP has won the support of some 350,000 garment workers from nearly 500 factories across Cambodia by promising to nearly double the monthly minimum wage to $160 if it wins a re-run of the July election, which Hun Sen is refusing to hold.

The government is refusing to raise the wage beyond $100 dollars a month and has ordered factories to reopen to prevent damage and job losses in an industry worth $5 billion a year.

Garment manufacturing is Cambodia's biggest foreign currency earner and a major employer. Many Western brands outsource footwear and apparel to Cambodian factories, in part because labour is cheaper than in China.

A senior official at the Garment Manufacturers Association in Cambodia has said it was too soon to asse?ss the cost of the strikes but estimated each factory could be losing $20,000-$30,000 a day.

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